Yesterday’s trade saw EUR/GBP within the range of 0.7491-0.7564. The daily high has also been the highest level since January 23rd, when a high of 0.7584 was recorded. The pair closed at 0.7546, gaining 0.67% on a daily basis.
At 6:58 GMT today EUR/GBP was up 0.04% for the day to trade at 0.7545. The pair touched a daily high at 0.7549 during early Asian trade.
Fundamentals
Euro area
Italian consumer inflation – preliminary estimate
Italys preliminary annualized consumer inflation probably decelerated to -0.3% in January, according to expectations, from 0% in December, according to final data released on January 14th. If so, this would be the lowest annual inflation in at least four years. In December the largest upward pressures, causing an impact on annual inflation rate, were reported for restaurants and hotels (+1%), furnishing and household equipment (+0.6%), clothing and footwear (+0.2%) and culture and leisure (+0.2%). On the other hand, prices of non-regulated energy products dropped the most, or 8% year-on-year, following a 3.1% fall in November. Cost of transport dropped 0.9% in December from a year ago, while prices of housing, water, electricity and gas were 0.4% lower. Consumers also paid less for food (a 0.2% decrease).
Key categories, included in Italys Consumer Price Index, are food and non-alcoholic beverages (accounting for 16% of total weight), transport (15%), restaurants and hotels (11%) and housing, water, electricity and other fuels (10%). Other categories are clothing and footwear (9%), furnishing and household equipment (8%), recreation and culture (8%) and health (also 8%). Communication, education, alcoholic beverages, tobacco and other goods and services comprise the remaining 15% of the index.
The nations preliminary annualized CPI, evaluated in accordance with the harmonized methodology, probably decreased 0.4% in January, according to market expectations, following another 0.1% dip in December. If so, this would be the lowest annual harmonized inflation in more than four years. The National Institute of Statistics (Istat) is to release the preliminary CPI report at 10:00 GMT.
United Kingdom
Construction activity
Activity in United Kingdom’s sector of construction probably slowed down for a fourth consecutive month in January, with the corresponding PMI coming in at 57.0, down from 57.6 in December. If so, this would be the lowest index reading since July 2013, when it was reported at 57.0. The index is based on a survey, encompassing managers of companies, operating in construction sector. They are asked about their estimate regarding current business conditions (new orders, output, employment, demand in the future). Values above the key level of 50.0 signify that activity in the sector has expanded. Lower-than-projected readings would reduce the appeal of the pound. The Chartered Institute of Purchasing and Supply (CIPS) is to announce the official reading at 9:30 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 0.7534. In case EUR/GBP manages to breach the first resistance level at 0.7576, it will probably continue up to test 0.7607. In case the second key resistance is broken, the pair will probably attempt to advance to 0.7649.
If EUR/GBP manages to breach the first key support at 0.7503, it will probably continue to slide and test 0.7461. With this second key support broken, the movement to the downside will probably continue to 0.7430.
The mid-Pivot levels for today are as follows: M1 – 0.7446, M2 – 0.7482, M3 – 0.7519, M4 – 0.7555, M5 – 0.7592, M6 – 0.7628.
In weekly terms, the central pivot point is at 0.7477. The three key resistance levels are as follows: R1 – 0.7553, R2 – 0.7614, R3 – 0.7690. The three key support levels are: S1 – 0.7416, S2 – 0.7340, S3 – 0.7279.
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